Published November 01, 2012
TOKYO – Japan's Sharp Corp, the struggling maker of Aquos TVs, increased its full-year operating loss forecast to 155 billion yen ($1.94 billion) from a previous 100 billion yen loss forecast. At a net level, it almost doubled its full-year loss forecast to 450 billion yen.
Sharp said, however, it expects to post an operating profit in the current October-March second half, after losing 168.9 billion yen ($2.11 billion) in the first half year - a target that will allow its banks to justify a $4.6 billion bailout of the TV maker.
Sharp has secured fresh loans from banks including Mizuho Financial Group and Mitsubishi Financial Group in return for a pledge to axe 10,000 jobs, sell assets including overseas TV assembly plants, and return to profit.
With redundancy packages usually amounting to at least a year's salary, layoffs in Japan are expensive.
Sharp has also mortgaged most of its offices and factories in Japan, including one that makes displays for Apple Inc's iPhone and iPad, to unlock the emergency financing.
Sharp posted a July-September operating loss of 74.8 billion yen ($936 million), compared with a profit of 30.1 billion yen a year ago, as it booked a $1.1 billion charge for a restructuring it has promised in return for financing to help avert collapse.
The average forecast by five analysts surveyed by Thomson Reuters I/B/E/S was for a quarterly operating loss of 50.4 billion yen.
The consumer electronics maker also wrote down 61 billion yen of deferred tax assets in the second quarter.
Since the start of the year, Sharp's shares have plunged more than 75 percent, while the benchmark Nikkei average has gained more than 5 percent. Sharp fell 1.7 percent on Thursday ahead of its earnings release.
($1 = 79.9300 Japanese yen)
(Reporting by Tim Kelly; Editing by Ian Geoghegan)